Category Archives: Airbus Industrie
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In a blockbuster announcement for the aerospace industry, European aerospace giant Airbus Group is buying a majority stake in Bombardier’s CSeries program. The two aircraft manufacturers announced the partnership Monday evening, calling it a win-win situation for both parties. The news comes weeks after the United States announced 300 per cent tariffs on exports of the aircraft following a complaint from rival Boeing.
The partnership brings together two complementary product lines, with 100-150 seat market segment expected to represent more than 6,000 new aircraft over the next 20 years.
The CSeries headquarters will remain in the Montreal area but a second assembly line for the 100- to 150-seat plane will also be established at the U.S. Airbus facility in Mobile, Alabama.
“Airbus is the perfect partner for us, Quebec and Canada,” said Bombardier CEO alain Bellemare in a statement. “This partnership should more than double the value of the CSeries program and ensures our remarkable game-changing aircraft realizes its full potential.” Officials from Bombardier said this would not have any negative impact on aerospace jobs in Quebec. The final assembly of the CSeries line of aircraft currently takes place at the Bombardier facilities in Mirabel. The partnership is expected to result in significant CSeries production costs savings by leveraging Airbus’ supply chain expertise.
Airbus will acquire a 50.01 per cent interest in the CSeries Aircraft Limited Partnership (CSALP), which manufactures and sells the plane. Bombardier will own 31 per cent, while the Quebec government’s investment agency will hold 19 per cent — a drop from the 49.5 per cent stake it had held before the deal.
Federal Economic Development Minister Navdeep Bains issued a statement after the Airbus announcement, saying he would review the sale by an international buyer. “Proposed investments of this kind require the government to consider whether they are in the national interest. The Airbus deal, like all significant proposed investments in Canada by non-Canadians, is subject to the Investment Canada Act-an act which I oversee,” he said. “In my review, I’ll be looking to see how this deal will benefit Canadians, support our aerospace sector and create good jobs.”
Quebec’s minister of the economy, Dominque Anglade, reacted positively to the news. “In the current context, the partnership with Airbus is, for us, the best solution to ensure the maintenance and creation of jobs in this strategic sector of the Quebec economy,” she said. The Quebec company has faced cash-flow problems in recent years, prompting Quebec’s pension plan to purchase a large stake in the company’s train division, while the government also invested in the CSeries. Anglade, said Quebec is open to recouping its investment.
“When there was investment made by the government of Quebec initially in the CSeries. We said that we were looking for another partner. We’ve always said that, it was very open. In anything that we would be looking at any proposal, we would look at the number of employments. Number one is the number of jobs that we have in Quebec, and to make sure that we maintain the environment for the aerospace industry,” said Anglade. “If you look at the numbers in the aerospace industry right now they’re pretty good. Actually there are a lot of things happening in the aerospace industry in Quebec and we want to maintain that.” She said, however that Bombardier could not count on getting more cash from government.
“I think we’ve done enough for the aerospace industry,” said Anglade when asked if Bombardier would get more money from government. The government invested US$1 billion in 2016 for a 49.5 per cent stake in Bombardier’s CSeries commercial jet program. Anglade said Monday she welcomes news that other players might be interested in investing in Bombardier. Bains told reporters at the same event Ottawa has shown a long-standing commitment to the aerospace sector.
The long legal battle ahead is also expected to cut into Bombardier’s cash flow, as it was counting on selling 75 CSeries jets to Delta airlines. Delta has said it wants those jets, and that it won’t pay the punitive duties demanded by the U.S. government.
The U.S. Dept. of Commerce has imposed two sets of duties totalling more than 300 per cent on Bombardier’s CSeries following a challenge from Boeing, an American company which never tried to sell planes to Delta.